Recent research reveals a growing public awareness and more favourable view of class actions, despite ongoing concerns about financial implications for claimants.
A comprehensive study by Portland Communications has highlighted a remarkable increase in public awareness and optimism regarding class actions. This is the highest level of public awareness recorded since data collection began in 2020. Surveys conducted included responses from over 2,000 individuals and 540 senior business leaders.
The findings indicate that 24% of consumers now claim high awareness of class actions, which marks a notable increase of five percentage points from the previous year. Meanwhile, those with low awareness have decreased from 39% to 34%. This trend is especially evident among younger demographics, possibly driven by recent high-profile group actions targeting younger participants, such as the student lawsuit against UCL.
Despite the enhanced awareness, there is still scepticism. Specifically, 80% of consumers, particularly older ones, view class actions as primarily profitable for litigation funders and lawyers, with many believing they may lead to financial losses for those involved.
The media’s portrayal of class actions often highlights the red tape involved in the compensation process, accusing legal teams of delaying payments. This scepticism is exemplified by Sir Alan Bates’ comments on Radio 4’s Today programme, expressing concerns that legal professionals, rather than victims, benefit financially from these actions.
Public interest remains high, notwithstanding these criticisms. Significant attention has been directed towards cases funded by litigation backers, such as those against the Post Office. However, understanding of litigation funding remains low, with 62% of consumers reporting minimal comprehension, an increase from 49% the previous year.
Despite this, there is broad acceptance that external funding is necessary for class actions to proceed, as people prefer this method over the idea of using public funds. The public’s endorsement of litigation in ESG matters and external investment is encouraging for funders, yet the perception that they benefit the most presents a reputational hurdle.
Regarding Environmental, Social, and Governance (ESG) issues, there is positive sentiment towards shareholder activism as a mechanism for holding companies accountable for not addressing climate risks. This view is shared by 53% of consumers, an increase from the previous year. Moreover, 77% of business leaders believe directors should be responsible for managing climate risks, a sentiment stronger than that among the general public by a margin of 5 percentage points.
The results also show that two-thirds of business leaders agree that group claims can potentially drive better corporate behaviour. However, there persists a significant lack of awareness regarding individual eligibility to claim damages in high-profile cases. Only 43% feel confident that their claims are being pursued without their self-initiative, with 30% expressing discomfort.
Researchers suggest this represents a challenge for claimant firms to enhance their strategies around class engagement and raise awareness promptly.
Simon Pugh, from Portland, interprets these developments as significant changes in public perception towards litigation particularly concerning ESG issues, indicating a potential shift in how such legal actions are viewed.
While public awareness and approval of class actions have significantly risen, challenges remain concerning trust in the legal process and financial implications for claimants. The findings point to the need for improved public engagement and transparency in the litigation process to further bolster confidence and understanding.
